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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



|x | QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------



For the quarterly period ended December 31, 2003



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------



COMMISSION FILE # 0-23969



POCAHONTAS BANCORP, INC.



|                       |  |                                           
|---------------------- |  | ------------------------------------------
|State of Incorporation |  |                                           
|DELAWARE               |  | IRS Employer Identification No. 71-0806097



|                                           |  |                 
|------------------------------------------ |  | ----------------
|Address                                    |  | Telephone Number
|1700 E. Highland Jonesboro, Arkansas 72401 |  | (870) 802-1700  



Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes x No ̈



Indicate by check mark whether the Registrant is an accelerated filer (as
defined by the Rule 12b-2 of the Securities Exchange Act of 1934).



Yes ̈No x.



There were 4,549,791 shares of Common Stock ($0.01 par value) issued and outstanding as of December 31, 2003.



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##### Table of Contents

POCAHONTAS BANCORP, INC.



TABLE OF CONTENTS



|                                                                                                                           |  |                                                                                       |  |     
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|                                                                                                                           |  |                                                                                       |  | Page
|PART I. FINANCIAL INFORMATION                                                                                              |  |                                                                                      
|                                                                                                                           |  |                                                                                      
|Item 1.                                                                                                                    |  | Unaudited Financial Statements:                                                       |  |     
|                                                                                                                           | 
|Condensed Consolidated Statements of Financial Condition at December 31, 2003 and September 30, 2003                       |  | 1                                                                                    
|                                                                                                                           | 
|Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended December 31, 2003 and 2002 |  | 2                                                                                    
|                                                                                                                           | 
|Condensed Consolidated Statement of Changes in Stockholders Equity for the Three Months Ended December 31, 2003           |  | 4                                                                                    
|                                                                                                                           | 
|Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2003 and 2002                      |  | 5                                                                                    
|                                                                                                                           | 
|Notes to Condensed Consolidated Financial Statements                                                                       |  | 7                                                                                    
|                                                                                                                           | 
|Independent Accountants Report                                                                                            |  | 12                                                                                   
|                                                                                                                           |  |                                                                                      
|Item 2.                                                                                                                    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 13  
|                                                                                                                           |  |                                                                                      
|Item 3.                                                                                                                    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 19  
|                                                                                                                           |  |                                                                                      
|Item 4.                                                                                                                    |  | Controls and Procedures                                                               |  | 20  
|                                                                                                                           | 
|PART II. OTHER INFORMATION                                                                                                 |  | 21                                                                                   
|                                                                                                                           |  |                                                                                      
|Signatures                                                                                                                 |  |                                                                                       |  | 22  
|                                                                                                                           |  |                                                                                      
|Exhibits                                                                                                                   |  |                                                                                       |  | 23  





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Item 1



POCAHONTAS BANCORP, INC.



CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)



|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                                                                                                                                 |  | December 31, 2003 |             |   | September 30, 2003 |  
|ASSETS                                                                                                                                                           |  |                   |             |   |                    |   |             |  
|Cash                                                                                                                                                             |  | $                 | 19,673,920  |   |                    | $ | 22,020,489  |  
|Cash surrender value of life insurance                                                                                                                           |  |                   | 7,419,819   |   |                    |   | 7,340,618   |  
|Securities held-to-maturity                                                                                                                                      |  |                   | 3,083,898   |   |                    |   | 5,403,862   |  
|Securities available-for-sale                                                                                                                                    |  |                   | 276,090,914 |   |                    |   | 293,569,266 |  
|Trading securities, at fair value                                                                                                                                |  |                   | 1,657,210   |   |                    |   | 1,497,252   |  
|Loans receivable, net                                                                                                                                            |  |                   | 393,232,047 |   |                    |   | 385,872,017 |  
|Loans receivable, held for sale                                                                                                                                  |  |                   | 992,575     |   |                    |   | 3,130,238   |  
|Accrued interest receivable                                                                                                                                      |  |                   | 4,330,184   |   |                    |   | 5,161,006   |  
|Premises and equipment, net                                                                                                                                      |  |                   | 13,810,801  |   |                    |   | 13,998,751  |  
|Federal Home Loan Bank stock, at cost                                                                                                                            |  |                   | 5,645,300   |   |                    |   | 5,583,700   |  
|Goodwill                                                                                                                                                         |  |                   | 8,847,572   |   |                    |   | 8,847,572   |  
|Core deposit premiums                                                                                                                                            |  |                   | 7,632,549   |   |                    |   | 7,880,406   |  
|Other assets                                                                                                                                                     |  |                   | 3,437,535   |   |                    |   | 3,182,703   |  
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|TOTAL ASSETS                                                                                                                                                     |  | $                 | 745,854,324 |   |                    | $ | 763,487,880 |  
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                             |  |                   |             |   |                    |   |             |  
|LIABILITIES:                                                                                                                                                     |  |                   |             |   |                    |   |             |  
|Deposits                                                                                                                                                         |  | $                 | 571,365,279 |   |                    | $ | 586,092,147 |  
|Federal Home Loan Bank advances                                                                                                                                  |  |                   | 98,445,770  |   |                    |   | 100,693,629 |  
|Deferred compensation                                                                                                                                            |  |                   | 2,688,067   |   |                    |   | 2,885,238   |  
|Accrued expenses and other liabilties                                                                                                                            |  |                   | 3,381,160   |   |                    |   | 3,899,149   |  
|Trust preferred securities                                                                                                                                       |  |                   | 16,926,342  |   |                    |   | 16,921,150  |  
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|Total liabilities                                                                                                                                                |  |                   | 692,806,618 |   |                    |   | 710,491,313 |  
|STOCKHOLDERS EQUITY:                                                                                                                                            |  |                   |             |   |                    |   |             |  
|Common stock, $0.01 par value, 8,000,000 shares authorized; 7,497,066 shares issued and 4,549,791 shares outstanding at December 31, 2003 and
September 30, 2003 |  |                   | 74,970      |   |                    |   | 74,970      |  
|Additional paid-in capital                                                                                                                                       |  |                   | 56,533,430  |   |                    |   | 56,533,430  |  
|Unearned ESOP shares                                                                                                                                             |  |                   | (808,863    | ) |                    |   | (538,121    | )
|Accumulated other comprehensive income                                                                                                                           |  |                   | 219,708     |   |                    |   | 899,339     |  
|Retained earnings                                                                                                                                                |  |                   | 21,200,661  |   |                    |   | 20,199,149  |  
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|                                                                                                                                                                 |  |                   | 77,219,906  |   |                    |   | 77,168,767  |  
|Treasury stock at cost, 2,947,275 shares, at December 31, 2003 and September 30, 2003                                                                            |  |                   | (24,172,200 | ) |                    |   | (24,172,200 | )
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|Total stockholders equity                                                                                                                                       |  |                   | 53,047,706  |   |                    |   | 52,996,567  |  
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                       |  | $                 | 745,854,324 |   |                    | $ | 763,487,880 |  
|                                                                                                                                                                 |  |                   |             |   |                    |   |             |  



See
notes to unaudited condensed consolidated financial statements.



1



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##### Table of Contents

POCAHONTAS BANCORP, INC.



CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)



|                                                    |  |                                |           |   |      |   |          
|--------------------------------------------------- |  | ------------------------------ | --------- | - | ---- | - | ---------
|                                                    |  | Three Months Ended December 31
|                                                    |  | 2003                           |           |   | 2002
|INTEREST INCOME:                                    |  |                                |           |   |      |   |          
|Loans receivable                                    |  | $                              | 6,213,706 |   |      | $ | 6,981,531
|Investment securities                               |  |                                | 3,239,810 |   |      |   | 2,064,771
|                                                    |  |                                |           |   |      |   |          
|Total interest income                               |  |                                | 9,453,516 |   |      |   | 9,046,302
|INTEREST EXPENSE:                                   |  |                                |           |   |      |   |          
|Deposits                                            |  |                                | 3,442,901 |   |      |   | 3,974,577
|Borrowed funds                                      |  |                                | 718,044   |   |      |   | 323,139  
|Trust preferred securities                          |  |                                | 314,194   |   |      |   | 338,406  
|                                                    |  |                                |           |   |      |   |          
|Total interest expense                              |  |                                | 4,475,139 |   |      |   | 4,636,122
|NET INTEREST INCOME                                 |  |                                | 4,978,377 |   |      |   | 4,410,180
|PROVISION FOR LOAN LOSSES                           |  |                                | 150,000   |   |      |   | 745,000  
|                                                    |  |                                |           |   |      |   |          
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                                | 4,828,377 |   |      |   | 3,665,180
|OTHER INCOME:                                       |  |                                |           |   |      |   |          
|Fees and service charges                            |  |                                | 790,522   |   |      |   | 934,510  
|Gain on sale of loans                               |  |                                | 350,081   |   |      |   | 1,127,845
|Gain (loss) on sale of securities                   |  |                                | (12,923   | ) |      |   | 5,496    
|Trading gains, net                                  |  |                                | 153,222   |   |      |   | 39,400   
|Gain on sale of branches                            |  |                                |          |   |      |   | 513,595  
|Other                                               |  |                                | 92,264    |   |      |   | 49,938   
|                                                    |  |                                |           |   |      |   |          
|Total other income                                  |  |                                | 1,373,166 |   |      |   | 2,670,783
|                                                    |  |                                |           |   |      |   |          
|OPERATING EXPENSE:                                  |  |                                |           |   |      |   |          
|Compensation and benefits                           |  |                                | 2,412,014 |   |      |   | 2,592,936
|Occupancy and equipment                             |  |                                | 728,758   |   |      |   | 618,722  
|Insurance premiums                                  |  |                                | 70,386    |   |      |   | 62,789   
|Professional fees                                   |  |                                | 228,439   |   |      |   | 270,727  
|Data processing                                     |  |                                | 166,493   |   |      |   | 179,379  
|Advertising and donations                           |  |                                | 70,366    |   |      |   | 171,053  
|Office supplies                                     |  |                                | 69,875    |   |      |   | 74,643   
|REO and other repossessed assets                    |  |                                | 64,791    |   |      |   | 121,536  
|Other                                               |  |                                | 320,995   |   |      |   | 361,089  
|                                                    |  |                                |           |   |      |   |          
|Total operating expense                             |  |                                | 4,132,117 |   |      |   | 4,452,874
|                                                    |  |                                |           |   |      |   |          
|INCOME BEFORE INCOME TAXES                          |  |                                | 2,069,426 |   |      |   | 1,883,088
|INCOME TAXES                                        |  |                                | 703,931   |   |      |   | 670,000  
|                                                    |  |                                |           |   |      |   |          
|NET INCOME                                          |  |                                | 1,365,495 |   |      |   | 1,213,088



(Continued)



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POCAHONTAS BANCORP, INC.



CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)



|                                                                        |  |                                |          |   |      |   |           |  
|----------------------------------------------------------------------- |  | ------------------------------ | -------- | - | ---- | - | --------- | -
|                                                                        |  | Three Months Ended December 31 |         
|                                                                        |  | 2003                           |          |   | 2002 |  
|OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:                          |  |                                |          |   |      |   |           |  
|Unrealized holding gain (loss) on securities arising during the period  |  | $                              | (688,160 | ) |      | $ | 204,669   |  
|Reclassification adjustment for (gains) / losses included in net income |  | $                              | 8,529    |   |      | $ | (3,627    | )
|                                                                        |  |                                |          |   |      |   |           |  
|Other comprehensive income (loss)                                       |  | $                              | (679,631 | ) |      | $ | 201,042   |  
|                                                                        |  |                                |          |   |      |   |           |  
|COMPREHENSIVE INCOME                                                    |  | $                              | 685,864  |   |      | $ | 1,414,130 |  
|                                                                        |  |                                |          |   |      |   |           |  
|EARNINGS PER SHARE:                                                     |  |                                |          |   |      |   |           |  
|Basic earnings per share                                                |  | $                              | 0.30     |   |      | $ | 0.28      |  
|                                                                        |  |                                |          |   |      |   |           |  
|Diluted earnings per share                                              |  | $                              | 0.30     |   |      | $ | 0.28      |  
|                                                                        |  |                                |          |   |      |   |           |  



(Concluded)



See notes to unaudited condensed consolidated financial
statements.



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POCAHONTAS BANCORP, INC.



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (UNAUDITED)



|                                                                                  |  |              |  |                           |        |                     |   |            |                                      |        |          |                   |  |   |                |   |  |                           |            |   |  |           |  |   |             |   |  |   |            |  
|--------------------------------------------------------------------------------- |  | ------------ |  | ------------------------- | ------ | ------------------- | - | ---------- | ------------------------------------ | ------ | -------- | ----------------- |  | - | -------------- | - |  | ------------------------- | ---------- | - |  | --------- |  | - | ----------- | - |  | - | ---------- | -
|                                                                                  |  | Common Stock |  | AdditionalPaid-In Capital |        | UnearnedESOP Shares |   |            | AccumulatedOtherComprehensive Income |        |          | Retained Earnings |  |   | Treasury Stock |   |  | TotalStockholders Equity |           
|                                                                                  |  | Shares       |  | Amount                    |        |                     |   |            |                                      | Shares |          | Amount            |  |  
|BALANCE, SEPTEMBER 30, 2003                                                       |  | 7,497,066    |  | $                         | 74,970 |                     | $ | 56,533,430 |                                      | $      | (538,121 | )                 |  | $ | 899,339        |   |  | $                         | 20,199,149 |   |  | 2,947,275 |  | $ | (24,172,200 | ) |  | $ | 52,996,567 |  
|Purchase of stock with ESOP loan                                                  |  |              |  |                           |        |                     |   |            |                                      |        | (270,742 | )                 |  |   |                |   |  |                           |            |   |  |           |  |   |             |   |  |   | (270,742   | )
|Net change in unrealized gain (loss) on available-for-sale securities, net of tax |  |              |  |                           |        |                     |   |            |                                      |        |          |                   |  |   | (679,631       | ) |  |                           |            |   |  |           |  |   |             |   |  |   | (679,631   | )
|Net income                                                                        |  |              |  |                           |        |                     |   |            |                                      |        |          |                   |  |   |                |   |  |                           | 1,365,495  |   |  |           |  |   |             |   |  |   | 1,365,495  |  
|Dividends                                                                         |  |             |  |                           |       |                     |   |           |                                      |        |         |                   |  |   |               |   |  |                           | (363,983   | ) |  |          |  |   |            |   |  |   | (363,983   | )
|                                                                                  |  |              |  |                           |        |                     |   |            |                                      |        |          |                   |  |   |                |   |  |                           |            |   |  |           |  |   |             |   |  |   |            |  
|BALANCE, DECEMBER 31, 2003                                                        |  | 7,497,066    |  | $                         | 74,970 |                     | $ | 56,533,430 |                                      | $      | (808,863 | )                 |  | $ | 219,708        |   |  | $                         | 21,200,661 |   |  | 2,947,275 |  | $ | (24,172,200 | ) |  | $ | 53,047,706 |  
|                                                                                  |  |              |  |                           |        |                     |   |            |                                      |        |          |                   |  |   |                |   |  |                           |            |   |  |           |  |   |             |   |  |   |            |  



See
notes to unaudited condensed consolidated financial statements.



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POCAHONTAS BANCORP, INC.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|                                                                                         |  |                                 |             |   |      |   |             |  
|---------------------------------------------------------------------------------------- |  | ------------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                         |  | Three months ended December 31, |            
|                                                                                         |  | 2003                            |             |   | 2002 |  
|OPERATING ACTIVITIES:                                                                    |  |                                 |             |   |      |   |             |  
|Net income                                                                               |  | $                               | 1,365,495   |   |      | $ | 1,213,088   |  
|Adjustments to reconcile net income to net cash provided (used) by operating activities: |  |                                 |             |   |      |   |             |  
|Provision for loan losses                                                                |  |                                 | 150,000     |   |      |   | 745,000     |  
|Depreciation of premises and equipment                                                   |  |                                 | 349,543     |   |      |   | 281,372     |  
|Amortization of core deposit premium                                                     |  |                                 | 247,856     |   |      |   | 276,461     |  
|Amortization of deferred loan fees                                                       |  |                                 | (14,919     | ) |      |   | (22,730     | )
|Amortization of premiums and discounts, net                                              |  |                                 | 11,692      |   |      |   | (166,248    | )
|Net (gain) on sales of loans                                                             |  |                                 | (790,522    | ) |      |   | (1,127,845  | )
|Net (gain) loss on sales of securities                                                   |  |                                 | 12,923      |   |      |   | (5,496      | )
|Net (gain) on sales of branches                                                          |  |                                 |            |   |      |   | (513,595    | )
|Increase in cash surrender value of life insurance policies                              |  |                                 | (79,201     | ) |      |   | (48,373     | )
|Change in operating assets and liabilities:                                              |  |                                 |             |   |      |   |             |  
|Trading securities                                                                       |  |                                 | (159,958    | ) |      |   | 392,941     |  
|Accrued interest receivable                                                              |  |                                 | 830,822     |   |      |   | 87,717      |  
|Other assets                                                                             |  |                                 | (691,234    | ) |      |   | (470,662    | )
|Deferred compensation                                                                    |  |                                 | (197,171    | ) |      |   | 237,953     |  
|Accrued expenses and other liabilities                                                   |  |                                 | (451,806    | ) |      |   | (743,740    | )
|                                                                                         |  |                                 |             |   |      |   |             |  
|Net cash provided (used) by operating activities                                         |  |                                 | 583,520     |   |      |   | 135,843     |  
|                                                                                         |  |                                 |             |   |      |   |             |  
|INVESTING ACTIVITIES:                                                                    |  |                                 |             |   |      |   |             |  
|Net effect of sale of branches to Bank of England, Arkansas                              |  |                                 |            |   |      |   | (14,044,395 | )
|Loan repayments, originations, and purchases, net                                        |  |                                 | (10,187,841 | ) |      |   | (8,475,005  | )
|Proceeds from sale of loans                                                              |  |                                 | 5,620,915   |   |      |   | 21,112,428  |  
|Net (increase) decrease in FHLB Stock                                                    |  |                                 | (61,600     | ) |      |   | (14,700     | )
|Purchase of investment securities                                                        |  |                                 | (12,355,261 | ) |      |   | (51,024,764 | )
|Proceeds from sale of REO                                                                |  |                                 | 436,403     |   |      |   |            |  
|Proceeds from sale of premises and equipment                                             |  |                                 | 6,048       |   |      |   | 5,413       |  
|Proceeds from sales, maturities and principal repayments of securities                   |  |                                 | 31,454,522  |   |      |   | 26,319,834  |  
|Purchases of premises and equipment                                                      |  |                                 | (167,641    | ) |      |   | (414,531    | )
|                                                                                         |  |                                 |             |   |      |   |             |  
|Net cash provided (used) by investing activities                                         |  |                                 | 14,745,545  |   |      |   | (26,535,720 | )
|                                                                                         |  |                                 |             |   |      |   |             |  



(Continued)



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POCAHONTAS BANCORP, INC.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|                                                 |  |                                 |             |   |      |   |            |  
|------------------------------------------------ |  | ------------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                 |  | Three months ended December 31, |            
|                                                 |  | 2003                            |             |   | 2002 |  
|FINANCING ACTIVITIES:                            |  |                                 |             |   |      |   |            |  
|Net increase in deposits                         |  | $                               | (14,726,868 | ) |      | $ | 41,715,399 |  
|Net decrease in FHLB advances                    |  |                                 | (2,247,859  | ) |      |   | (77,585    | )
|Payments on other borrowings                     |  |                                 | (66,182     | ) |      |   |           |  
|Purchase of stock with ESOP loan                 |  |                                 | (270,742    | ) |      |   |            |  
|Purchase of treasury shares                      |  |                                 |            |   |      |   | (845,420   | )
|Issuance of RRPs                                 |  |                                 |            |   |      |   | 8,812      |  
|Dividends paid                                   |  |                                 | (363,983    | ) |      |   | (351,898   | )
|                                                 |  |                                 |             |   |      |   |            |  
|Net cash provided (used) by financing activities |  |                                 | (17,675,634 | ) |      |   | 40,449,308 |  
|                                                 |  |                                 |             |   |      |   |            |  
|NET INCREASE (DECREASE) IN CASH                  |  |                                 | (2,346,569  | ) |      |   | 14,049,431 |  
|CASH AT BEGINNING OF PERIOD                      |  |                                 | 22,020,489  |   |      |   | 34,306,598 |  
|                                                 |  |                                 |             |   |      |   |            |  
|CASH AT END OF PERIOD                            |  | $                               | 19,673,920  |   |      | $ | 48,356,029 |  
|                                                 |  |                                 |             |   |      |   |            |  



See
notes to unaudited condensed consolidated financial statements.



6



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POCAHONTAS BANCORP, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



|1. | BASIS OF PRESENTATION
|-- | ---------------------



The condensed consolidated statement of financial condition information at September 30, 2003 was derived from the audited balance sheets of Pocahontas
Bancorp, Inc. (the Company), at September 30, 2003. The condensed consolidated financial statements at and for the three months ended December 31, 2003 and 2002 are unaudited. The accompanying condensed consolidated financial statements
were prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation 10 of Regulation S-X. Certain information required for a complete
presentation in accordance with generally accepted accounting principles has been omitted. All adjustments that are, in the opinion of management, necessary for a fair presentation of the interim financial statements have been included. The results
of operations for the three months ended December 31, 2003, are not necessarily indicative of the results that may be expected for the entire fiscal year or any interim period.



The interim financial information should be read in conjunction with the consolidated financial statements and notes of the
Company, including a summary of significant accounting policies followed by the Company, included in the Annual Report for the fiscal year ended September 30, 2003. The accompanying condensed consolidated financial statements include the accounts of
the Company, its wholly owned subsidiary, First Community Bank (the Bank); as well as the Banks subsidiaries, Southern Mortgage Corporation, P.F. Service, Inc. and Sun Realty, Inc., which provide real estate services (collectively
referred to as the Company). All significant intercompany transactions have been eliminated in consolidation.



Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.



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Stock Compensation - The Company applies the provisions of APB 25 in accounting for its
stock options plans, as allowed under Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation. Accordingly, no compensation cost has been recognized for the options granted to employees
or directors with strike prices at or above the market value of the stock. Had compensation cost for these options been determined at the grant dates for awards under those plans consistent with the methods of SFAS No. 123, the Companys pro
forma net income and pro forma earnings per share for the three months ended December 31, 2003 and 2002, would have been as follows:



|                                                                                                                                    |  |                                 |       |   |      |   |       |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----- | - | ---- | - | ----- | -
|                                                                                                                                    |  | Three-Months Ended December 31, |      
|                                                                                                                                    |  | 2003                            |       |   | 2002 |  
|Net income (in thousands):                                                                                                          |  |                                 |       |   |      |   |       |  
|As reported                                                                                                                         |  | $                               | 1,365 |   |      | $ | 1,213 |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax
effects |  | $                               | (12   | ) |      | $ | (27   | )
|                                                                                                                                    |  |                                 |       |   |      |   |       |  
|Pro forma                                                                                                                           |  | $                               | 1,353 |   |      | $ | 1,186 |  
|                                                                                                                                    |  |                                 |       |   |      |   |       |  
|Earnings per share:                                                                                                                 |  |                                 |       |   |      |   |       |  
|Basic - as reported                                                                                                                 |  | $                               | 0.30  |   |      | $ | 0.28  |  
|Basic - pro forma                                                                                                                   |  | $                               | 0.30  |   |      | $ | 0.28  |  
|Diluted - as reported                                                                                                               |  | $                               | 0.30  |   |      | $ | 0.28  |  
|Diluted - pro forma                                                                                                                 |  | $                               | 0.30  |   |      | $ | 0.27  |  



In determining the
above pro forma disclosure, the fair value of options granted during the year was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: expected volatility - 37%, expected life
of grant - 6.5 years, risk free interest rate 5.25%, and expected dividend rate of 2.5%.



Recently Adopted Accounting Standards- In December 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46 (revised December 2003), Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51 (FIN 46R), which replaces FASB Interpretation No. 46. FIN 46R clarifies the application of Accounting Research Bulletin No. 51, Consolidated
Financial Statements,to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional
subordinated financial support. Application of FIN 46R (or FIN 46) is required in financial statements of public entities that have interests in variable interest entities or potential variable interest entities commonly referred to as
special-purpose entities for periods ending after December 15, 2003. Application by public entities for all other types of entities is required in financial statements for periods ending after March 15, 2004.



Under the provisions of FIN 46R, the Company is required to deconsolidate
Pocahontas Capital Trust I and II (the Trusts), which are business trusts established to facilitate the issuance of the trust preferred securities. The Company adopted FIN 46R as of December 31, 2003. The Company has presented the
subordinated debentures payable to the Trusts as a liability in its consolidated financial statements and reclassified the prior period to present the subordinated debentures as a liability. The interest expense has historically been presented as a
component of net interest income, such presentation will not change based on the adoption of FIN 46R. The adoption of FIN 46R did not have an effect on net income or stockholders equity.



In July 2003, the Board of Governors of the Federal Reserve System issued a
supervisory letter instructing bank holding companies to continue to include the trust preferred securities in their Tier I capital for regulatory capital purposes. As of December 31, 2003, assuming the Company was not allowed to include the $16.9
million in trust preferred securities issued by the Trusts in Tier I capital, the Company would still exceed the regulatory required minimum for capital adequacy purposes.



Reclassifications -Certain amounts for the three-month period ended December 31, 2002 have been reclassified
to conform to the presentation for the three-month period ended December 31, 2003.



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##### Table of Contents

|2. | EARNINGS PER SHARE
|-- | ------------------



The earnings per share amounts were computed using the weighted average number of shares outstanding during the periods presented. In accordance with
Statement of Position No. 93-6, EmployersAccountingfor Employee Stock OwnershipPlans, issued by the American Institute of Certified Public Accountants, shares owned by the Companys Employee Stock Ownership
Plan that have not been committed to be released are not considered to be outstanding for the purpose of computing earnings per share.



The weighted average numbers of shares used in the basic and diluted earnings per share calculation are set out in the table below:



|                                                                                      |  |                    |  |                 
|------------------------------------------------------------------------------------- |  | ------------------ |  | ----------------
|                                                                                      |  | Three Months Ended
|                                                                                      |  | December 31,2003   |  | December 31,2002
|Total weighted average basic shares outstanding                                       |  | 4,504,991          |  | 4,303,532       
|Add dilutive effect of unexercised options                                            |  | 105,492            |  | 37,085          
|                                                                                      |  |                    |  |                 
|Total weighted average shares outstanding for dilutive earnings-per-share calculation |  | 4,610,483          |  | 4,340,617       
|                                                                                      |  |                    |  |                 



|3. | DECLARATION OF DIVIDENDS
|-- | ------------------------



On November 19, 2003, the Board of Directors declared an $.08 per share quarterly cash dividend for holders of record December 15, 2003. The dividend was
paid January 5, 2004.



|4. | BENEFIT PLANS
|-- | -------------



Stock Option Plan - The Companys stockholders approved the 1998 Stock Option Plan (SOP) on October 23, 1998. The SOP
provides for a committee of the Companys Board of Directors to award incentive non-qualified or compensatory stock options to purchase up to 357,075 shares of Company common stock. The options vest in equal amounts over five years with the
first vesting date on October 23, 1999. Options granted vest immediately in the event of retirement, disability, or death, or following a change in control of the Company. Outstanding stock options can be exercised over a ten-year period. Under the
SOP, options have been granted to directors and key employees of the Company. The exercise price in each case equals the fair market value of the Companys stock at the date of grant. The Company granted 350,000 options on October 23, 1998,
which have an exercise price of $9.00 per share. As of December 31, 2003, 254,000 options were outstanding.



NARK Stock Option Plan-In connection with the acquisition of North Arkansas Bancshares, Inc. (NARK) by the Company on June 18,
2002, the outstanding options of the 1998 Stock Option and Incentive Plan (SOIP) of NARK were exchanged for options to purchase stock of the Company. Each outstanding option to purchase a share of NARK stock was exchanged for an option to purchase
1.515 shares of the Companys stock. The SOIP granted both incentive and non-incentive options to key employees and directors of NARK. All options granted expire one year after the employee or director ceases to maintain continuous service as
an employee or director of the Company or an affiliate. The exercise price in each case equals the original exercise price divided by the exchange rate. On June 19, 2002 the exchange resulted in 30,970 outstanding options at an exercise price of
$6.44 each. On December 31, 2003, 26,257 options were outstanding.



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##### Table of Contents

|5. | BRANCH SALES
|-- | ------------



On November 20, 2003, the Company entered into an agreement with Bank of Cave City, Arkansas for the Company to sell its branch in Strawberry, Arkansas to
the Bank of Cave City. The transaction is expected to be completed during March 2004. The sale of the branch resulted from managements decision to concentrate on the Banks other Arkansas markets. The Strawberry, Arkansas branch office
had approximately $11.9 million in deposits as of December 31, 2003.



|6. | GOODWILL AND INTANGIBLE ASSETS
|-- | ------------------------------



The Company performed its annual impairment test as of April 1, 2003 and concluded there was no impairment to the book value of the Companys
goodwill. Absent any impairment indicators, the Company will perform its next impairment test as of April 1, 2004.



As of December 31, 2003 the Company had total core deposit premiums of $7,632,549, net of accumulated amortization of $2,679,007. Core deposit premiums
are estimated to have a useful life of 10 years.



The Company
has no identifiable intangible assets with indefinite useful lives.



Total amortization expense for core deposit premiums was approximately $260,000 for the three-month period ended December 31, 2003. Amortization expense for the net carrying amount of core deposit premiums at December 31, 2003, is estimated
to be as follows (in thousands):



|                                      |  |   |      
|------------------------------------- |  | - | -----
|Nine months ending September 30, 2004 |  | $ | 784  
|Year ending September 30, 2005        |  |   | 1,045
|Year ending September 30, 2006        |  |   | 1,045
|Year ending September 30, 2007        |  |   | 1,045
|Year ending September 30, 2008        |  |   | 911  
|After September 30, 2008              |  |   | 2,803
|                                      |  |   |      
|Total                                 |  | $ | 7,633
|                                      |  |   |      



|7. | CONTINGENCIES
|-- | -------------



The Company is a defendant in certain claims and legal actions arising in the ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the condensed consolidated financial statements of the Company and its subsidiaries.



|8. | OFF-BALANCE SHEET ARRANGEMENTS AND COMMITMENTS
|-- | ----------------------------------------------



The Company, in the normal course of business, makes commitments to buy or sell assets or to incur or fund liabilities. Commitments include, but are not
limited to the origination, purchase, or sale of loans, the purchase of investment securities, fulfillment of commitments under letters-of-credit, extensions of credit on home equity lines of credit and construction loans, and the commitment to fund
withdrawals of savings accounts at maturity.



At December 31,
2003, the Companys off-balance sheet arrangements principally included lending commitments, which are described below. At December 31, 2003, the Company had no interests in non-consolidated special purpose entities. At December 31, 2003,
commitments included:



Total approved loan origination
commitments outstanding were $7.8 million, including $2.7 million loans committed to sell.



Rate lock agreements with customers of $2.7 million, all of which have been locked with an investor.



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##### Table of Contents

Undisbursed balances of construction loans of $2.8 million.



Total unused lines of credit of $36.9 million.



Outstanding letters of credit of $0.8 million.



Total certificates of deposit scheduled to mature in one year or less of
$214.4 million.



Total unfunded commitments to originate loans
for sale and the related commitments to sell of $2.7 million meet the definition of a derivative financial instrument; the related asset and liability are considered immaterial at December 31, 2003.



Based on historical experience, management believes that a significant
portion of maturing deposits will remain with the Company. The Company anticipates that it will continue to have sufficient funds, through repayments, deposits and borrowings, to meet its current commitments.



The Companys exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend credit, standby letters of credit, and financial guarantees written is represented by the contractual notional amount of those instruments. The Company uses the same credit
policies in making commitments and conditional obligations as it does for on-balance sheet instruments.



Unless noted otherwise, the Company does not require collateral or other security to support such financial instruments with credit risk.



|9. | ALLOWANCE FOR LOAN LOSSES
|-- | -------------------------



A summary of the activity in the allowance for loan losses is as follows (in thousands):



|                                   |  |                    |       |   |                   |   |       |  
|---------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ----- | -
|                                   |  | Three Months Ended |      
|                                   |  | December 31, 2003  |       |   | December 31, 2002 |  
|Balance at beginning of the period |  | $                  | 4,068 |   |                   | $ | 3,285 |  
|Provision for losses               |  |                    | 150   |   |                   |   | 745   |  
|Charge-offs                        |  |                    | (512  | ) |                   |   | (472  | )
|Recoveries                         |  |                    | 151   |   |                   |   | 8     |  
|                                   |  |                    |       |   |                   |   |       |  
|Balance at end of the period       |  | $                  | 3,857 |   |                   | $ | 3,566 |  
|                                   |  |                    |       |   |                   |   |       |  



|10. | EMPLOYEE STOCK OWNERSHIP PLAN
|--- | -----------------------------



The Company established an Employee Stock Ownership Plan (ESOP) on March 31, 1998. In 2003, the ESOP established a $2.0 million line of credit
with the company that is to be used to purchase additional shares of Company stock. The loan is collateralized by shares that are purchased with the proceeds of the loan; as of December 31, 2003, the ESOP owed $0.8 million on the line of credit. As
the loan is repaid, ESOP shares will be allocated to participants of the ESOP and are available for release to the participants subject to the vesting provisions of the ESOP.



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##### Table of Contents

INDEPENDENT ACCOUNTANTS REPORT



The Board of
Directors and Stockholders of

Pocahontas Bancorp, Inc.

Pocahontas, Arkansas



We have reviewed the accompanying condensed
consolidated statement of financial condition of Pocahontas Bancorp, Inc. and subsidiaries (the Company) as of December 31, 2003, and the related condensed consolidated statements of income and comprehensive income and of cash flows for
the three months ended December 31, 2003 and 2002, and stockholders equity for the three-month period ended December 31, 2003. These financial statements are the responsibility of the Companys management.



We conducted our review in accordance with standards established by the American Institute of
Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.



Based on our review, we are not aware of
any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.



We have previously audited, in accordance with auditing standards generally accepted in the
United States of America, the consolidated statement of financial condition of Pocahontas Bancorp, Inc. and subsidiaries as of September 30, 2003, and the related consolidated statements of income and comprehensive income, stockholders equity,
and cash flows for the year then ended (not presented herein); and in our report dated December 16, 2003, we expressed an unqualified opinion, which includes an explanatory paragraph relating to the adoption of SFAS No. 142, Goodwill and other
Intangible Assets on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial condition as of September 30, 2003, is fairly stated, in all material
respects, in relation to the consolidated statement of financial condition from which it has been derived.



As discussed in Note 1 to the condensed consolidated financial statement, the Company changed its method of accounting for its trust preferred securities to conform to the Financial Accounting Standards Board
Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51, as of December 31, 2003.



|                                       
|---------------------------------------
|                                       
|/s/ Deloitte & Touche LLP              
|                                       
|Little Rock, Arkansas February 09, 2004



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|ITEM 2 | 
|------ | 



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



This quarterly report on Form 10-Q contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements.
There are a number of important factors that could cause the Companys actual results to differ materially from those contemplated by such forward-looking statements. These important factors include, without limitation, the Banks
continued ability to originate quality loans, fluctuation of interest rates, real estate market conditions in the Banks lending areas, general and local economic conditions, the Banks continued ability to attract and retain deposits, the
Companys ability to control costs, new accounting pronouncements and changing regulatory requirements.



Critical Accounting Policy - In preparing financial information, management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and
expenses for the periods shown. The accounting principles followed by the Company and the methods of applying these principles conform with accounting principles generally accepted in the United States and general banking practices. Estimates and
assumptions most significant to the Company are related primarily to allowance for loan losses and goodwill and are summarized in the following discussion and the notes to the consolidated financial statements.



The Company has established a systematic method of periodically reviewing the credit quality
of the loan portfolio in order to establish a sufficient allowance for losses on loans. The allowance for losses on loans is based on managements current judgments about the credit quality of individual loans and segments of the loan
portfolio. The allowance for losses on loans is established through a provision for loan losses based on managements evaluation of the risk inherent in the loan portfolio, and considers all known internal and external factors that affect loan
collectability as of the reporting date. Such evaluation, which includes a review of all loans on which full collectability may not be reasonably assured, considers among other matters, the estimate net realizable value or the fair value of the
underlying collateral, economic conditions, historical loan loss experience, managements knowledge of inherent risks in the portfolio that are probable and reasonably estimable and other factors that warrant recognition in providing an
appropriate loan loss allowance.



The Companys goodwill (the amount in
excess of fair value of acquired net assets) is reviewed at least annually to ensure that there have been no events or circumstances resulting in an impairment of the recorded amount of excess purchase price. Adverse changes in the economic
environment, operations of acquired business units, or other factors could result in a decline in projected fair values. If the estimated fair value is less than the carrying amount, a loss would be recognized to reduce the carrying amount to
implied fair value.



Management has discussed the development and selection of
these critical accounting policies with the Audit Committee of the Board of Directors.



Financial Condition at December 31, 2003, as compared to September 30, 2003.



General. Total assets decreased to $745.9 million at December 31, 2003 from $763.5 million at September 30, 2003, a decrease of $17.6 million or 2.3%. The decrease was primarily the result of the sale of
$12.7 million of securities, and principal payments and maturities of $18.4 million in securities, which was only partly offset by $12.4 million in securities purchases, resulting in a net decrease in investment securities of $19.8 million or 6.6%.
The yield on average interest earning assets for the three months ended December 31, 2003 was 5.58% compared to 6.05 % for the year ended September 30, 2003.



13



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##### Table of Contents

Loans receivable, net. Net loans receivable increased to $393.2 million at December 31, 2003 from $385.9
million at September 30, 2003, an increase of $7.3 million or 1.9%. Total nonperforming loans increased to $5.8 million, at December 31, 2003 from $5.6 million at September 30, 2003, an increase of $0.2 million or 3.6%. Of the $5.8 million in
nonperforming loans at December 31, 2003, $3.7 million represented loans that were obtained from previous bank acquisitions. The increase in nonperforming loans was not seen by management as attributable to any recognizably distinguishable factor
though the Bank has been changing for some time from being a traditional single-family lending institution to diversifying into a larger percentage of its portfolio in commercial loans.



Loans receivable, held for sale. Loans held for sale decreased to $1.0 million at December 31, 2003 from $3.1 million at
September 30, 2003, a decrease of $2.1 million or 67.7%. During the quarter ended December 31, 2003, the Company sold $5.6 million of loans, of which $3.1 million were classified held for sale as of September 30, 2003. Management expects to continue
to sell loans in the secondary market as necessary to manage interest rate risks. The amount of loans to be sold will vary with loan demand.



Investment Securities. The investment securities portfolio decreased $19.8 million, or 6.6%, to $279.2 million at December 31, 2003, from $299.0 million at
September 30, 2003. The decrease was primarily the result of the sale of $12.7 million of securities, and principal payments and maturities of $18.4 million in securities, which was only partly offset by $12.4 million in securities purchases.



Deposits. Historically, deposits have provided the Company with
a stable source of relatively low cost funding. The market for deposits is competitive, which has caused the Company to utilize primarily certificate accounts that are more responsive to market interest rates rather than passbook accounts. The
Company offers a traditional line of deposit products that currently includes checking, interest-bearing checking, savings, certificates of deposit, commercial checking and money market accounts. Total deposits decreased to $571.4 million at
December 31, 2003 from $586.1 million at September 30, 2003, a decrease of $14.7 million or 2.5%. The change in deposits was primarily the result of the disbursement of customers Christmas Club savings accounts.



FHLB Advances. The Company also relies upon FHLB advances as a source to
fund assets. At December 31, 2003, FHLB advances totaled $98.4 million, a decrease of $2.3 million, or 2.3%, from $100.7 million at September 30, 2003.



Stockholders equity. Stockholders equity increased $0.1 million or 0.2% to $53.1 million at December 31, 2003, from $53.0 million at September
30, 2003. The increase in stockholders equity was primarily due to net income of $1.4 million, a $0.7 million decrease in unrealized gain on securities, dividends of $0.4 million and an increase of $0.3 million in unearned ESOP shares.



Comparison of Results of Operations for the Three Months Ended December
31, 2003 and 2002.



Overview. Net income was $1.4
million for the quarter ended December 31, 2003, compared to net income of $1.2 million for the quarter ended December 31, 2002, an increase of $0.2 million or 16.6%. Basic and diluted earnings per share were $.30 per share for the quarter ended
December 31, 2003 compared to basic and diluted earnings per share of $0.28 for the same period last year.



Net interest income.Net interest income for the quarter ended December 31, 2003 was $5.0 million compared to $4.4 million for the quarter ended December 31, 2002, an increase of $0.6 million or 13.6%.
The increase was primarily due to an increase in interest income of $0.4 million or 4.5% and a decrease in interest expense of $0.1 million or 2.2%. The Companys net interest rate spread was 3.02% for the quarter ended December 31, 2003
compared to 3.41% for the quarter ended December 31, 2002. Net interest margin was 2.94% for the quarter ended December 31, 2003 compared to 3.26% for the quarter ended December 31, 2002. The decrease was primarily due to lower yields on average
interest earning assets for the quarter ended December 31, 2003 compared to the same period last year, as loans were prepaid and refinanced in the lower market rate environment.



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##### Table of Contents

The table below analyzes net interest income by component and in terms of changes in the volume of interest-earning
assets and interest-bearing liabilities and the changes in the related yields and rates for the three-month period ended December 31, 2003, compared to the three-month period ended December 31, 2002.



|                                   |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------ | ----- | - | ---- | - | ------ | ------------ |  | - | ------------------------- | - |  | - | ----- | -
|                                   |  | Rate/Volume Analysis (In thousands) Three-month period ended December 31, 2003 vs. 2002 Increase/(Decrease) Due to |      
|                                   |  | Volume                                                                                                             |       |   | Rate |   |        | Rate/ Volume |  |   | Total Increase (Decrease) |  
|Interest income:                   |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  
|Loan Receivable                    |  | $                                                                                                                  | (148  | ) |      | $ | (2,972 | )            |  | $ | 2,352                     |   |  | $ | (768  | )
|Investment securities              |  |                                                                                                                    | 7,961 |   |      |   | (1,661 | )            |  |   | (5,125                    | ) |  |   | 1,175 |  
|                                   |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  
|Total interest earning assets      |  |                                                                                                                    | 7,813 |   |      |   | (4,633 | )            |  |   | (2,773                    | ) |  |   | 407   |  
|Interest expense:                  |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  
|Deposits                           |  |                                                                                                                    | 1,789 |   |      |   | (3,523 | )            |  |   | 1,202                     |   |  |   | (532  | )
|Borrowed funds                     |  |                                                                                                                    | 5,232 |   |      |   | (1,258 | )            |  |   | (3,603                    | ) |  |   | 371   |  
|                                   |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  
|Total interest bearing liabilities |  |                                                                                                                    | 7,021 |   |      |   | (4,781 | )            |  |   | (2,401                    | ) |  |   | (161  | )
|                                   |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  
|Net change in net interest income  |  | $                                                                                                                  | 792   |   |      | $ | 148    |              |  | $ | (372                      | ) |  | $ | 568   |  
|                                   |  |                                                                                                                    |       |   |      |   |        |              |  |   |                           |   |  |   |       |  



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##### Table of Contents

Average Balance Sheets (Dollars in Thousands)



|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|-------------------------------------------------------------------------------- |  | ------------------------------------ | ------- | -------- | ----------------------------- | ------------------- |  | ------------------------------------ | --------------- |  | -------- | ------- | ------------------- | - | ------ | --------------- | ----- | -------- |  | ------------------- | ------- |  | - | ----- |  | ----- | -
|                                                                                 |  | Three Months Ended December 31, 2003 |         |          | Year Ended September 30, 2003 |                     |  | Three Months Ended December 31, 2002 |                
|                                                                                 |  | Average Balance                      |         | Interest |                               | Average Yield/ Cost |  |                                      | Average Balance |  | Interest |         | Average Yield/ Cost |   |        | Average Balance |       | Interest |  | Average Yield/ Cost |        
|Interest-earning assets:(1)                                                      |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Loan receivable, net(2)                                                          |  | $                                    | 394,165 |          | $                             | 6,213               |  | 6.30                                 | %               |  | $        | 391,588 |                     | $ | 26,260 |                 | 6.71  | %        |  | $                   | 396,270 |  | $ | 6,981 |  | 7.05  | %
|Investment securities                                                            |  |                                      | 283,603 |          |                               | 3,240               |  | 4.57                                 | %               |  |          | 221,182 |                     |   | 10,784 |                 | 4.88  | %        |  |                     | 144,433 |  |   | 2,065 |  | 5.72  | %
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Total interest-earning assets                                                    |  |                                      | 677,768 |          |                               | 9,453               |  | 5.58                                 | %               |  |          | 612,770 |                     |   | 37,044 |                 | 6.05  | %        |  |                     | 540,703 |  |   | 9,046 |  | 6.69  | %
|Noninterest-earning cash                                                         |  |                                      | 33,853  |          |                               |                     |  |                                      |                 |  |          | 29,453  |                     |   |        |                 |       |          |  |                     | 39,614  |  |   |       |  |       |  
|Other noninterest-earning assets                                                 |  |                                      | 44,610  |          |                               |                     |  |                                      |                 |  |          | 43,452  |                     |   |        |                 |       |          |  |                     | 41,412  |  |   |       |  |       |  
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Total assets                                                                     |  |                                      | 756,231 |          |                               |                     |  |                                      |                 |  |          | 685,675 |                     |   |        |                 |       |          |  |                     | 621,729 |  |   |       |  |       |  
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Interest-bearing liabilities:                                                    |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Demand deposits                                                                  |  | $                                    | 318,636 |          | $                             | 1,472               |  | 1.85                                 | %               |  | $        | 278,990 |                     | $ | 5,436  |                 | 1.95  | %        |  | $                   | 217,473 |  | $ | 1,351 |  | 2.48  | %
|Time deposits                                                                    |  |                                      | 266,470 |          |                               | 1,971               |  | 2.96                                 | %               |  |          | 298,290 |                     |   | 11,232 |                 | 3.77  | %        |  |                     | 308,389 |  |   | 2,624 |  | 3.40  | %
|Borrowed funds(3)                                                                |  |                                      | 95,898  |          |                               | 718                 |  | 2.99                                 | %               |  |          | 32,764  |                     |   | 1,281  |                 | 3.91  | %        |  |                     | 20,759  |  |   | 310   |  | 5.97  | %
|Trust Preferred                                                                  |  |                                      | 16,925  |          |                               | 314                 |  | 7.42                                 | %               |  |          | 16,911  |                     |   | 1,292  |                 | 7.64  | %        |  |                     | 16,904  |  |   | 351   |  | 8.31  | %
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Total interest-bearing liabilities                                               |  |                                      | 697,929 |          |                               | 4,475               |  | 2.56                                 | %               |  |          | 626,955 |                     |   | 19,241 |                 | 3.07  | %        |  |                     | 563,525 |  |   | 4,636 |  | 3.29  | %
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Noninterest-bearing liabilities(4)                                               |  |                                      | 6,334   |          |                               |                     |  |                                      |                 |  |          | 9,346   |                     |   |        |                 |       |          |  |                     | 10,157  |  |   |       |  |       |  
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Total liabilities                                                                |  |                                      | 704,263 |          |                               |                     |  |                                      |                 |  |          | 636,301 |                     |   |        |                 |       |          |  |                     | 573,682 |  |   |       |  |       |  
|Stockholders equity                                                             |  |                                      | 51,968  |          |                               |                     |  |                                      |                 |  |          | 49,374  |                     |   |        |                 |       |          |  |                     | 48,047  |  |   |       |  |       |  
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Total liabilities and stockholders equity                                       |  | $                                    | 756,231 |          |                               |                     |  |                                      |                 |  | $        | 685,675 |                     |   |        |                 |       |          |  | $                   | 621,729 |  |   |       |  |       |  
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Net interest income                                                              |  |                                      |         |          | $                             | 4,978               |  |                                      |                 |  |          |         |                     | $ | 17,803 |                 |       |          |  |                     |         |  | $ | 4,410 |  |       |  
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Net interest rate spread(5)                                                      |  |                                      |         |          |                               |                     |  | 3.02                                 | %               |  |          |         |                     |   |        |                 | 2.98  | %        |  |                     |         |  |   |       |  | 3.41  | %
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Interest-earning assets and net interest margin(6)                               |  | $                                    | 677,768 |          |                               |                     |  | 2.94                                 | %               |  | $        | 612,770 |                     |   |        |                 | 2.91  | %        |  | $                   | 540,703 |  |   |       |  | 3.26  | %
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  
|Ratio of average interest-earning assets to average interest-bearing liabilities |  |                                      |         |          |                               |                     |  | 97.11                                | %               |  |          |         |                     |   |        |                 | 97.74 | %        |  |                     |         |  |   |       |  | 95.95 | %
|                                                                                 |  |                                      |         |          |                               |                     |  |                                      |                 |  |          |         |                     |   |        |                 |       |          |  |                     |         |  |   |       |  |       |  



|(1) | All interest-earning assets are disclosed net of loans in process, unamortized yield adjustments, and valuation allowances.
|--- | ---------------------------------------------------------------------------------------------------------------------------



|(2) | Does not include interest on nonaccrual loans. Non-performing loans are included in loans
receivable, net.
|--- | ----------------------------------------------------------------------------------------------------------



|(3) | Includes FHLB advances and securities sold under agreements to repurchase.
|--- | --------------------------------------------------------------------------



|(4) | Escrow accounts are noninterest-bearing and are included in noninterest-bearing liabilities.
|--- | --------------------------------------------------------------------------------------------



|(5) | Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Net interest margin represents the net interest income as a percentage of average interest-earning assets.
|--- | ----------------------------------------------------------------------------------------------------------



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Provision for Loan Losses. Provision for loan losses for the quarter ended December 31, 2003 was $0.2
million compared to $0.7 million for the quarter ended December 31, 2002, a decrease of $0.5 million or 71.4%. Management has established a systematic method of periodically reviewing the credit quality of the loan portfolio in order to establish a
sufficient allowance for losses on loans. The provision for loan loss for the quarters ended December 31, 2003 and 2002 reflected managements estimate of the amount of allowance for loan losses required based on managements current
judgments about the credit quality of individual loans and segments of the loan portfolio. Management believes that it has appropriately identified all problem loans included in the loan portfolio and has either charged-off or provided an
appropriate valuation allowance based on its estimates of collectability and credit quality of such loans. Based on presently available information, management believes that the current allowance for loan losses is adequate; however, changing
economic and other conditions may require future adjustments to the allowance for loan losses. During the quarter ended December 31, 2002, management was providing for losses on loans acquired in acquisitions of other depository institutions thereby
resulting in a more significant provision than the provision required for the quarter ended December 31, 2003, a period during which no recent acquisitions had occurred and during which loan portfolio performance was relatively stable.



Other income. Other income decreased to $1.4 million for the quarter ended
December 31, 2003 compared to $2.7 million for the quarter ended December 31, 2002, a decrease of $1.3 million or 48.1%. The decrease in non-interest income was primarily due to the $0.5 million gain on the sale of branches recognized during the
quarter ended December 31, 2002, and a decrease in the gain on sale of loans of $0.8 million or 72.7% for the quarter ended December 31, 2003 to $0.3 million from $1.1 million for the quarter ended December 31, 2002. The $1.1 million gain on sale of
loans for the quarter ended December 31, 2002 included the sale of a loan package that provided $0.6 million of the gain on sale of loans which in addition to a subdued refinancing environment during the quarter ended December 31, 2003 resulted in a
decreased number of loans sold and therefore a lower gain on sale of loans.



Operating expense.Total operating expenses were $4.1 million for the quarter ended December 31, 2003, compared to $4.4 million for the quarter ended December 31, 2002, a decrease of $0.3 million or 6.8%. The decrease in
operating expense was primarily the result of a decrease in compensation expense and advertising expenses during the quarter ended December 31, 2003. Compensation expense decreased due to the recognition of additional expense in 2002 related to a
deferred compensation agreement entered into with a retiring officer of the Company during the quarter ended December 31, 2002. The decrease in advertising expenses during the quarter ended December 31, 2003 from December 31, 2002 was the result of
the Company handling the advertising campaign internally compared to the utilization of an advertising firm during the quarter ended December 31, 2002.



Non-performing Loans and Loan Loss Provisions



The allowance for loan losses is established through a provision for loan losses based on managements quarterly asset classification review and evaluation of the
risk inherent in the Companys loan portfolio and changes in the nature and volume of its loan activity. Such evaluation, which includes a review of all loans on which full collection may not be reasonably assured, considers among other
matters, the estimated value of collateral, cash flow analysis, historical loan loss experience, and other factors that warrant recognition in providing allowances.



A provision of $0.2 million was made during the quarter ended December 31, 2003. The Companys allowance for loan losses totaled $3.9
million, or 1.0% of total loans at December 31, 2003 compared to $4.1 million, or 1.0% of total loans, at September 30, 2003, a decrease of $0.2 million or 4.9%. Net charge offs totaled $0.4 million or 0.1% of total loans, for the quarter ended
December 31, 2003. Total nonperforming loans increased to $5.8 million at December 31, 2003 from $5.6 million at September 30, 2003, an increase of $0.2 million. Based on presently available information, management believes that the current
allowance for loan losses is adequate. Changing economic and other conditions may require future adjustments to the allowance for loan losses.



17



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During the last three fiscal years, the Company has completed acquisitions of four separate banks. The loans acquired as
part of these acquisitions have contributed to the increase in the balance of nonperforming loans in the Companys portfolio; of the $5.8 million in nonperforming loans as of December 31, 2003, $3.7 million, or 63.8% are loans acquired as part
of the bank acquisitions. Nonperforming commercial loans have increased $2.2 million due to the acquisitions. We believe that the increase in non-performing commercial loans is a result of a lower quality of underwriting and collection efforts at
the acquired institutions prior to the Companys acquisition of the institution compared to the Companys underwriting and collection efforts and is due to commercial loans having a higher degree of risk of uncollectability than
single-family loans. Approximately, $2.0 million of loan loss allowance on the loans was transferred with these bank acquisitions. Additionally, $2.9 million in charge offs have been recorded in connection with the loans acquired in these
acquisitions since June 2001.



Loans are placed on non-accrual status when, in
the judgment of management, the probability of collection of interest is deemed to be insufficient to warrant further accrual. When a loan is placed on non-accrual status, previously accrued but unpaid interest is deducted from interest income and a
corresponding specific interest reserve is established. The Bank generally does not accrue interest on loans past due 90 days or more. Loans may be reinstated to accrual status when payments are made to bring the loan under 90 days past due and, in
the opinion of management, collection of the remaining balance can be reasonably expected. Delinquent loans 90 days or more past due increased $0.2 million or 3.8% to $5.8 million at December 31, 2003 from $5.6 million at September 30, 2003. The
balance of interest income not recognized by the Company on the non-accrual loans was $0.5 million at December 31, 2003 compared to $0.4 million at September 30, 2003. There was no interest income recognized on non-accrual loans during the periods.



The following table sets forth information regarding loans delinquent for 90
days or more (nonperforming loans) and real estate owned by the Company on the dates indicated.



|                                                    |  |                        |       |   |                    |   |       |  
|--------------------------------------------------- |  | ---------------------- | ----- | - | ------------------ | - | ----- | -
|                                                    |  | December 31, 2003      |       |   | September 30, 2003 |  
|                                                    |  | (Dollars in Thousands) |      
|Nonperforming loans:                                |  |                        |       |   |                    |   |       |  
|Single family                                       |  | $                      | 2,534 |   |                    | $ | 2,383 |  
|Agriculture real estate                             |  |                        | 205   |   |                    |   | 66    |  
|Commercial real estate                              |  |                        | 1,709 |   |                    |   | 1,919 |  
|Commercial non real estate                          |  |                        | 917   |   |                    |   | 764   |  
|Other loans                                         |  |                        | 474   |   |                    |   | 478   |  
|                                                    |  |                        |       |   |                    |   |       |  
|Total nonperforming loans:                          |  |                        | 5,839 |   |                    |   | 5,610 |  
|Total real estate owned and repossessed assets(1)   |  |                        | 1,010 |   |                    |   | 876   |  
|                                                    |  |                        |       |   |                    |   |       |  
|Total non-performing assets                         |  | $                      | 6,849 |   |                    | $ | 6,486 |  
|                                                    |  |                        |       |   |                    |   |       |  
|Total nonperforming loans to total loans receivable |  |                        | 1.48  | % |                    |   | 1.44  | %
|Total nonperforming loans to total assets           |  |                        | 0.78  | % |                    |   | 0.74  | %
|Total nonperforming assets to total assets          |  |                        | 0.92  | % |                    |   | 0.85  | %



|(1) | Net of valuation allowances
|--- | ---------------------------



The Company determines the impairment of loans by assessing the probability that the borrower will not be able to fulfill the contractual terms of the agreement as part
of the quarterly review for determining necessary provisions and loan loss allowances. Impaired loans decreased $1.1 million or 12.1% to $8.0 million at December 31, 2003 from $9.1 million at September 30, 2003. The decrease in impaired loans is
primarily attributable to the foreclosure and subsequent transfer of $0.8 million loans to real estate owned and $0.5 million in charge offs during the three months ended December 31, 2003.



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The following is a summary of information pertaining to impaired and non-accrual loans:



|                                                            |  |                   |       |                    |   |      
|----------------------------------------------------------- |  | ----------------- | ----- | ------------------ | - | -----
|                                                            |  | December 31, 2003 |       | September 30, 2003
|                                                            |  | (in thousands)   
|Impaired loans with a valuation allowance                   |  | $                 | 7,985 |                    | $ | 9,065
|Impaired loans without a valuation allowance                |  |                   |      |                    |   |     
|                                                            |  |                   |       |                    |   |      
|Total Impaired Loans                                        |  | $                 | 7,985 |                    | $ | 9,065
|                                                            |  |                   |       |                    |   |      
|Valuation allowance related to impaired loans               |  | $                 | 1,418 |                    | $ | 1,680
|Total non-accrual loans                                     |  | $                 | 5,838 |                    | $ | 5,610
|Total loans past-due ninety days or more and still accruing |  | $                 | 312   |                    | $ | 414  



|                                             |  |                    |       |                    |   |      
|-------------------------------------------- |  | ------------------ | ----- | ------------------ | - | -----
|                                             |  | Three Months Ended
|                                             |  | December 31, 2003  |       | September 30, 2003
|                                             |  | (in thousands)    
|Average investment in impaired loans         |  | $                  | 8,525 |                    | $ | 6,725
|                                             |  |                    |       |                    |   |      
|Interest income recognized on impaired loans |  | $                  | 57    |                    | $ | 87   
|                                             |  |                    |       |                    |   |      



Interest income recognized on a cash
basis on impaired loans is not significantly different from interest recognized on impaired loans above. No additional funds are committed to be advanced in connection with impaired loans.



Loan delinquency and losses on loans and REO are closely connected to the local economy. The
Company operates in rural areas and in many of its locations one or two employers significantly influence the local markets. Should the economy deteriorate to a point that those employers begin reducing their work force, it could have a material
negative impact on the Company.



ITEM 3



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



General. It is the objective of the Company to minimize, to the degree prudently possible, its exposure to interest rate risk, while maintaining an acceptable interest rate spread. Interest rate spread is the difference between the
Companys yield on its interest-earning assets and its cost of interest-bearing liabilities. Interest rate risk is generally understood to be the sensitivity of the Companys earnings, net asset values, and stockholders equity to
changes in market interest rates.



Changes in interest rates affect the
Companys earnings. The effect on earnings of changes in interest rates generally depends on how quickly the Companys yield on interest-earnings assets and cost of interest-bearing liabilities react to the changes in market rates of
interest. If the Companys cost of deposit accounts reacts more quickly to changes in market interest rates than the yield on the Companys mortgage loans and other interest-earnings assets, then an increasing interest rate environment is
likely to adversely affect the Companys earnings and a decreasing interest rate environment is likely to favorably affect the Companys earnings. On the other hand, if the Companys yield on its mortgage loans and other
interest-earnings assets reacts more quickly to changes in market interest rates than the Companys cost of deposit accounts, then an increasing rate environment is likely to favorably affect the Companys earnings and a decreasing
interest rate environment is likely to adversely affect the Companys earnings.



Net Portfolio Value. The value of the Companys loan and investment portfolio will change as interest rates change. Rising interest rates will generally decrease the Companys net portfolio value (NPV), while
falling interest rates will generally increase the value of that portfolio. The following table sets forth, quantitatively, as of September 30, 2003, the estimate of the projected changes in NPV in the event of a 100,



19



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##### Table of Contents

200, and 300 basis point instantaneous and permanent increase and a 100 basis point decrease in market interest rates. Due to the current low prevailing
interest rate environment, the changes in NPV is not estimated for a decrease in interest rates of 200 or 300 basis points.



|                                                   |        |                        |          |  |   |          |   |                                                                |       |    |  |      |   |  |       |   
|-------------------------------------------------- | ------ | ---------------------- | -------- |  | - | -------- | - | -------------------------------------------------------------- | ----- | -- |  | ---- | - |  | ----- | --
|Change inInterest Ratesin Basis Points(Rate Shock) |        | Net Portfolio Value    |          |  |   |          |   | Change in NPVas a Percentage ofEstimated MarketValue of Assets |      
|                                                   | Amount |                        | $ Change |  |   | % Change |   |                                                                | Ratio |    | 
|                                                   |        | (Dollars in Thousands) |          |  |   |          |   |                                                                |      
|+300                                               |        | $                      | 51,356   |  | $ | (23,083  | ) |                                                                | (31.0 | )% |  | 6.96 | % |  | (2.66 | )%
|+200                                               |        |                        | 59,999   |  |   | (14,440  | ) |                                                                | (19.4 | )% |  | 8.00 | % |  | (1.62 | )%
|+100                                               |        |                        | 68,221   |  |   | (6,218   | ) |                                                                | (8.4  | )% |  | 8.94 | % |  | (0.68 | )%
|0                                                  |        |                        | 74,439   |  |   |         |   |                                                                | 0.0   | %  |  | 9.62 | % |  | 0.00  | % 
|-100                                               |        |                        | 76,276   |  |   | 1,837    |   |                                                                | 2.5   | %  |  | 9.77 | % |  | 0.15  | % 



Computations of prospective effects of
hypothetical interest rate changes are calculated by the OTS from data provided by the Company and are based on numerous assumptions, including relative levels of market interest rates, loan repayments and deposit runoffs, and should not be relied
upon as indicative of actual results. Further, the computations do not contemplate any actions the Company may undertake in response to changes in interest rates.



Management cannot predict future interest rates or their effect on the Companys NPV in the future. Certain shortcomings are inherent
in the method of analysis presented in the computation of NPV. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in differing degrees to changes in market interest rates.
Additionally, certain assets, such as adjustable rate loans, which represent the Companys primary loan product, have features that restrict changes in interest rates during the initial term and over the remaining life of the asset. In
addition, the proportion of adjustable rate loans in the Companys portfolio could decrease in future periods due to refinancing activity if market rates decrease. Further, in the event of a change in interest rates, prepayment and early
withdrawal levels could deviate significantly from those assumed in the table. Finally, the ability of many borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase.



ITEM 4



CONTROLS AND PROCEDURES



| | (a) | Evaluation of disclosure controls and procedures.
| | --- | -------------------------------------------------



Under the supervision and with the participation of our management, including the Companys Chief Executive Officer and Chief Financial Officer, the
Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Companys disclosure controls and procedures were effective in timely alerting them to the material
information relating to the Company (or its consolidated subsidiaries) required to be included in its periodic SEC filings.



| | (b) | Changes in internal controls.
| | --- | -----------------------------



There has been no change made in the Companys internal controls over financial reporting during the period covered by this report that has
materially affected or is reasonably likely to materially affect the Companys internal control over financial reporting.



20



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------



None



|Item 2. | Changes in Securities and Use of Proceeds
|------- | -----------------------------------------



None



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------



None



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------



None



|Item 5. | Other Information
|------- | -----------------



None



|Item 6. | Exhibits and Reports
|------- | --------------------



(a) Exhibits



|                   |  |                                                            
|------------------ |  | -----------------------------------------------------------
|                   | 
|Exhibit No. 31.1  |  | Certification of President and Chief Executive Officer.    
|                   | 
|Exhibit No. 31.2  |  | Certification of Chief Financial Officer                   
|                   | 
|Exhibit No. 32.1  |  | Written Statement of President and Chief Executive Officer.
|                   | 
|Exhibit No. 32.2  |  | Written Statement of Chief Financial Officer               



(b) Reports -



On December 08, 2003, the Company filed with the Securities and Exchange Commission a
Current Report on Form 8-K. The report disclosed in Item 9 Regulation FD Disclosure that the Company had released earnings for the three and twelve month periods ended on September 30, 2003. Financial statements were filed as an exhibit
to the report.



On December 23, 2003, the Company filed with the Securities and
Exchange Commission a Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934. The report included the Notice of Annual Stockholder Meeting which included the date and time of the annual meeting as well as the matters to be
voted on by shareholders. No financial statements were required to be filed with this report.



21



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of
the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |  |  |                                                    
|----------------------- |  |  |  | ---------------------------------------------------
|                        |  |  |  | POCAHONTAS BANCORP, INC.                           
|                        |  | 
|Date: February 13, 2004 |  |  |  | /s/ Dwayne Powell                                  
|                        |  |  |  |                                                    
|                        |  |  |  | Dwayne Powell President and Chief Executive Officer



|                        |  |  |  |                                       
|----------------------- |  |  |  | --------------------------------------
|                        |  | 
|Date: February 13, 2004 |  |  |  | /s/ Terry Prichard                    
|                        |  |  |  |                                       
|                        |  |  |  | Terry Prichard Chief Financial Officer



22